11 June Daily technical trader

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  • 1. Page 1 of 2 TECHNICAL ANALYSIS: QE INDEX AND KEY STOCKS TO CONSIDER QE Index: Short-Term – Neutral The QE Index gained marginally around 1 point (0.01%) as it shaved all the early losses to end flat with a positive bias. However, the index faces its immediate resistance of 13,020.0. The index needs to move above this level and sustain above it in order for the bulls to be back in action. Conversely, traders may need to keep a close watch on the support of the 12,940.0 level, as any retreat below this level may have bearish implications. Industries Qatar: Short-Term – Bounce Back IQCD gained 1.72% and bounced back, breaching in a single swoop both its resistances of QR181.40 and QR182.50 along with the descending trendline, which had restricted its bullish move in the past. We believe this strong breach of resistances has bullish implications. Moreover, the RSI is moving up toward the mid-line, which is a positive sign. Traders could consider buying at the current level and on decline up to QR183.0 with a stop loss of QR182.50. Al Rayan Islamic Index: Short-Term – Neutral The QERI Index extended its losses for the third straight session and fell marginally around -0.17%. The index momentarily slipped below its immediate support of 4,341.10, but later rebounded and recouped majority of its losses. Meanwhile, the index developed a Doji candle pattern on daily charts, which indicates indecision on the part of buyers and sellers. We believe if the index manages to stay above 4,341.10, it may attempt a rebound toward the 4,400.0 level. Vodafone Qatar: Short-Term – Bounce back VFQS gained 1.91% and bounced back breaching its resistances of QR20.0 along with the descending trendline. Moreover, the stock ended on a sizable bullish candlestick formation on daily charts, indicating a likely continuation of this bounce back. Further, the RSI is in the buy-zone, supporting this bullish sentiment. Thus, traders could consider buying at the current level and on declines up to QR20.10 for a target of QR20.79 with a strict stop loss of QR20.0. Qatar Islamic Bank: Short-Term – Rebound QIBK rebounded and cleared the 21-day moving average after retracing over the past two days. Moreover, the stock developed a bullish Harami candlestick pattern on daily charts, indicating a likely advance. We believe if the stock manages to cling onto the 21-day moving average, it may set the stage for proceeding toward QR100.0, followed by QR102.0. However, any dip below the 21-day moving average may result in a pullback. Nakilat.: Short-Term – Pullback QGTS failed to move above QR23.90 and declined below its important support of QR23.40. Moreover, with the RSI declining further from the mid-line and the MACD growing bearish, QGTS’s preferred direction seems to be on the downside. We believe the stock may continue to drift lower and test its support of QR23.0. Any weakness below this level may pull the stock further down to test QR22.45. However, a close above QR23.40 may provide some relief.
  • 2. Contacts Saugata Sarkar Abdullah Amin, CFA Shahan Keushgerian Sahbi Kasraoui Ahmed Al-Khoudary QNB Financial Services SPC Head of Research Senior Research Analyst Senior Research Analyst Manager - HNWI Head of Sales Trading – Institutional Contact Center: (+974) 4476 6666 Tel: (+974) 4476 6534 Tel: (+974) 4476 6569 Tel: (+974) 4476 6509 Tel: (+974) 4476 6544 Tel: (+974) 4476 6548 PO Box 24025 saugata.sarkar@qnbfs.com.qa abdullah.amin@qnbfs.com.qa shahan.keushgerian@qnbfs.com.qa sahbi.alkasraoui@qnbfs.com.qa ahmed.alkhoudary@qnbfs.com.qa Doha, Qatar DISCLAIMER: This publication has been prepared by QNB Financial Services SPC (“QNBFS”) a wholly-owned subsidiary of Qatar National Bank (“QNB”). QNBFS is regulated by the Qatar Financial Markets Authority and the Qatar Exchange; QNB is regulated by the Qatar Central Bank. This publication expresses the views and opinions of QNBFS at a given time only. It is not an offer, promotion or recommendation to buy or sell securities or other investments, nor is it intended to constitute legal, tax, accounting, or financial advice. We therefore strongly advise potential investors to seek independent professional advice before making any investment decision. Although the information in this report has been obtained from sources that QNBFS believes to be reliable, we have not independently verified such information and it may not be accurate or complete. While this publication has been prepared with the utmost degree of care by our analysts, QNBFS does not make any representations or warranties as to the accuracy and completeness of the information it may contain, and declines any liability in that respect. QNBFS reserves the right to amend the views and opinions expressed in this publication at any time. It may also express viewpoints or make investment decisions that differ significantly from, or even contradict, the views and opinions included in this report. COPYRIGHT: No part of this document may be reproduced without the explicit written permission of QNBFS. Page 2 of 2 *These stocks are today’s suggested ideas Overall Methodology: The charts and descriptions on Page 1 provide an indicative view of the future direction of the equities mentioned. The table on page 2 has been provided to denote historical movements in certain stocks. The historical trend analysis uses 21- and 55- day SMAs for indicating short-term and long-term trends, respectively. Based on these SMAs, the historical direction of the trend is denoted as UP, DOWN or FLAT. Selection of Key Stocks of the Day: Key stocks’ selection is based on our analysis of 19 members of the QE Index (excludes QNBK QD). Analysis includes identifying trends (short-term as well as long-term), patterns and support/resistance levels. Trend Direction: The methods used to determine trend direction are subjective in nature. We use 21-day SMA and 55-day SMA, absolute price movements, price movements relative to SMAs and accurately drawn trend lines and chart patterns to determine the short- and long-term trends. Investment Horizon: The definition of short term and long term depends upon investors’ preferences and their investment objectives. As a rule of thumb, the time horizon for traders/short-term trend is 1-3 weeks while it is 1-3 months for investors/long-term trend. Combining Technical and Fundamental Analysis: Investors can combine technical analysis (TA) with fundamental analysis (FA) to maximize their investment returns. While the “True Value” of stocks could be estimated by FA, the entry and exit timings could be fine tuned using technical analysis to benefit from short-term movements in stock prices. Trading Tactics: The trend direction should be analyzed based on the time-horizon of your investments. In general, investors attempt selling close to resistance levels during a downtrend and attempt buying close to support levels during uptrend. Definitions: 1> Simple Moving Average (SMA): A SMA is the average of the closing price of a security for a given period. 2> RSI (Relative Strength Index): A technical momentum indicator that ranges from 0 to 100 and compares the stock’s recent price movements by evaluating recent gains and losses. Stocks with RSI above 70 could be considered overbought and below 30 could be considered oversold. If the RSI falls below 70, it is a bearish signal. On the other hand, if the RSI rises above 30 it is considered bullish. We use a RSI of 14 days. 3> MACD (Moving Average Convergence Divergence): MACD denotes the relationship between two moving averages, which is used to spot changes in strength, direction, momentum and duration of a stock price trend. The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the signal line, is also plotted on top of the MACD, functioning as a trigger for buy/sell signals. The MACD line above the signal line provides a positive signal and vice versa. Name (Ticker) Last Close Trend Support Resistance Short Term Long Term First Second First Second Qatar Exchange Index (QE Index) 12,970.81 DOWN UP 12,939.80 12,850.00 13,019.55 13,100.00 Al Rayan Islamic Index (QERI Index) 4,358.15 DOWN UP 4,341.10 4,301.89 4,400.00 4,444.86 Banks and Financial Services Banks and Masraf Al Rayan (MARK QD) 53.80 DOWN UP 52.30 51.80 57.30 59.90 Commercial Bank of Qatar (CBQK QD) 65.70 DOWN DOWN 64.92 64.00 66.50 67.30 Doha Bank (DHBK QD) 61.00 DOWN DOWN 61.00 59.90 62.00 63.00 Qatar Islamic Bank (QIBK QD)* 99.10 UP UP 98.50 96.00 100.00 102.00 Qatar International Islamic Bank (QIIK QD) 84.60 DOWN UP 83.00 80.70 86.10 87.80 Qatar Insurance (QATI QD) 80.00 UP UP 79.00 78.00 80.70 81.40 Al Khalij Commercial Bank (KCBK QD) 22.90 DOWN DOWN 22.90 22.50 23.49 24.00 Consumer Goods and Services Consumer G Medicare Group (MCGS QD) 83.70 DOWN UP 83.00 81.70 85.00 87.80 Al Meera Consumer Goods Co. (MERS QD) 182.00 DOWN UP 180.00 175.00 183.00 185.00 Industrials Industrials Industries Qatar (IQCD QD)* 183.60 DOWN DOWN 182.50 181.40 185.00 186.40 Qatar Electricity & Water Co. (QEWS QD) 189.00 FLAT UP 188.00 185.00 190.00 192.00 Gulf International Services (GISS QD) 89.90 DOWN DOWN 86.60 83.00 91.40 93.00 Qatari Investors Group (QIGD QD) 61.50 DOWN DOWN 61.30 59.70 62.40 64.70 Real Estate Real Estate Barwa Real Estate Co. (BRES QD) 42.00 UP UP 41.40 41.00 43.00 44.50 United Development Co. (UDCD QD) 25.55 DOWN UP 25.50 25.29 26.00 26.45 Telecom Telecom Ooredoo (ORDS QD) 152.00 UP UP 151.00 149.00 153.50 155.20 Vodafone Qatar (VFQS QD)* 20.25 UP UP 20.00 19.29 20.79 21.25 Transportation Transportat Nakilat (QGTS QD)* 23.22 DOWN FLAT 23.00 22.45 23.40 23.90 Milaha (QNNS QD) 90.00 DOWN DOWN 88.90 87.30 91.20 93.20